Tds

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Tarak Shah (Querist)
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08 June 2016 Can payment of 3 month salary on the retirement of the employee by debiting STAFF WELFARE FUND (Being the normal practise followed by the organisation) is liable for TDS? As this payment is not done by debiting Salary expenses account. Further at the year end, organisation shows the said payment as a part of salary in Form 16. Staff welfare fund was created YOY basis partly from the appropriation of profit and partly by collecting some token amount from employee from there regular salary.

Pl. guide whether the whole payment by way gratuitous gesture by Organisation (Approved in BOD) at the time of retirement of the employee is liable for TDS?

Rupesh Jain

Rupesh Jain (Expert)
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08 June 2016 salary will be liable to tds if salary on any employee exceeds exempt limit. its no diff what a/c you debit for exp.

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